Shirazi Notice – July 2013

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IN THIS ISSUE:

Legislative Alerts

Employer Mandate Delayed One Year
Defense of Marriage Act (DOMA) Ruled Unconstitutional
Final Contraceptive Regulations for Religious Organizations Issued

Health Care Reform

CoverColorado to Stop Coverage in 2014

Carrier Updates

Anthem Offers Change of Effective Date
New Rocky Mountain Health Plans Individual & Family Plans

 

LEGISLATIVE ALERTS:

Employer Mandate Delayed One Year

On Tuesday, July 2, 2013, the Obama administration announced that the employer mandate aspect of the Patient Protection and Affordable Care Act (PPACA) will be delayed by one year.

The mandate requires businesses with 50 or more workers to provide health insurance coverage to employees. As a result, the administration will start enforcing the mandate in 2015, rather than January 1, 2014, in an effort to give businesses more time to prepare. Penalties for firms not providing health coverage to employees will now begin in 2015 – after next year’s congressional elections.

The new delay will not affect other aspects of the health law, including the establishment of exchanges in states for low-income Americans to obtain health insurance.

This announcement does not affect the individual mandate, which requires most taxpayers to either purchase insurance or pay a penalty.

The following charts provide a summary of provisions within the Affordable Care Act (ACA) and their impact on the different funding types and group coverages. Please know this is subject to change and these charts should be used for reference purposes only, but may serve as a useful guide to quickly reference which provisions affect your group health plan.

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Defense of Marriage Act (DOMA) Ruled Unconstitutional

On June 26, 2013, the Supreme Court ruled that the federal Defense of Marriage Act, defining “marriage” as a union between a man and a woman only for purposes of many federal laws, is unconstitutional.

The Court stated that by denying recognition to same-sex couples who are legally married under state law, federal law discriminates against them by not approving state-sanctioned same-sex marriage.

What does this mean?
This means that same-sex couples who are legally married must now be treated the same under federal law as married opposite-sex couples. However, states that do not recognize same sex marriages may continue to establish their own state laws relating to the subject.

How does this affect employee benefits?
Married same-sex couples in states where the unions are legal will be eligible for equal benefits under federal programs, such as the Family and Medical Leave Act (FMLA), the Employee Retirement Income Security Act (ERISA), the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Benefits Reconciliation Act (COBRA), the Affordable Care Act (ACA), Equal Employment Opportunity, Social Security, and immigration and tax laws.

The Supreme Court’s ruling will only impact same-sex couples in states that legally recognize these relationships. For states without legalized same-sex marriages, employees in same-sex relationships will not be impacted by this decision.

As an initial course of action, employers should consider the following:

  1. Determine which employees are in same-sex marriages. Employers should begin to administer employee benefits plans and policies in a manner that recognizes same-sex marriages of employees who were either married in a state that recognizes same-sex marriages, and live in that state, and/or were married in one jurisdiction but live in another jurisdiction that recognizes same-sex marriages performed in other jurisdictions. 
    • Only 12 states (California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island,  Vermont and Washington) and the District of Columbia currently recognize same-sex marriages.
    • Many other states have approved civil unions, including Colorado. Colorado’s Civil Union Act specifically states that it is not granting same-sex couples the right to marry.
  2. Plan administration changes. The Court’s decisions likely are a status change event, which could allow employees to make mid-year changes to health FSA elections. Same sex-spouses are also now entitled to COBRA and employees can elect dependent life for same-sex spouses. Employees also may now take FMLA leave to care for a sick same-sex spouses.
  3. Plan design considerations. Employers will need to consider whether any benefits program revisions are necessary or desired in response to the Court’s decisions.
  4. Plan amendments. Plan documents should describe accurately the coverage of eligible dependents (defining who is an eligible spouse) and the benefits available to same-sex spouses.
  5. Employee communications. Expect many questions from employees regarding same-sex marriages and you could consider an initial communication to tell employees what the impact of the Court’s decisions will have on their benefits.

Ultimately, employers should work with their third party administrators and legal counsel to ensure that their benefit plans become fully-compliant with the law.

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Final Contraceptive Regulations for Religious Organizations Issued

On June 28, 2013, the Departments of Health and Human Services, Labor and Treasury issued final regulations about contraceptive coverage for religious organizations that object to covering contraceptive services. The final rule changes the effective date from plan years beginning on or after August 1, 2013 to plan years beginning on or after January 1, 2014.

Contraceptive Coverage – Highlights of the Final Rule

What Stayed the Same

  • Group health plans sponsored by religious employers such as churches do not have to cover contraceptive services.
  • Group health plans sponsored by religious non-profit organizations such as hospitals, schools, universities and charities that object to offering contraceptive coverage do not have to provide contraceptive coverage. Instead, the plan’s insurer or third-party administrator (TPA) is required to provide or arrange for contraceptive coverage separately from the group health plan at no cost to the organization or plan participants.
  • Group health plans sponsored by for-profit, secular employers are required to cover contraceptives, even if they object to contraceptives for religious reasons.

What Changed

Effective Date

  • The final regulation is effective for plan years beginning on or after January 1, 2014. The original effective date was August 1, 2013. Religious non-profit organizations that have certified under existing temporary safe harbor provisions that they do not want to cover contraceptives can exclude contraceptive coverage for plan years beginning between August 1 and December 31, 2013.

Self-Certification

  • Religious non-profit organizations must self-certify that they do not want to cover contraceptives only one time – not every year. The certification must be completed before the beginning of the first plan year for which it will be effective. Employers must present the certificate to any insurer or TPA they contract with.
  • For self-funded plans, the employer must self-certify to its TPA that it will not act as plan administrator for contraceptive services.

Administration

  • For insured plans, insurers must exclude contraceptive coverage from the employer’s group plan and pay for contraceptive services separately from the employer’s plan. However, insurers will not be required to issue individual insurance policies to cover contraceptives. Instead, the insurer will pay for all FDA-approved contraceptive services for covered employees and their dependents without charging any premium or fee to the employer, or any cost sharing such as copays or coinsurance to plan participants.
  • For self-funded plans, the final regulations make the TPA an ERISA plan administrator and claims administrator for the purpose of providing payments for contraceptive services. The administrator can pay for the contraceptive services or contract with an insurer to provide the benefits. The cost of contraceptive services provided to self-insured employers can be reimbursed through adjustments to the Federally-Facilitated Exchange (FFE) user fees paid by TPAs or insurers who pay for contraceptive coverage.

Plan Participant Notification

The TPA or insurer must notify plan participants that separate contraceptive coverage is available. This notice must be provided separately from, but at the same time as, when employees receive enrollment materials for their group health plan.

Revised Definition of Religious Employers

The final regulation includes a revised definition of religious employers effective August 1, 2013. The new definition eliminates the requirement that religious employers have promotion of faith as their sole purpose and only hire and serve people of their faith. It requires only that religious employers be churches or houses of worship as defined by the Internal Revenue Code.

This change was made to clarify that a church or house of worship does not have to offer contraceptive coverage, even if it provides charitable social services to or employs people of different religious faiths.

Student Health Plans, Multiple Employer Groups and State Laws

  • Student health plans are subject to the same rules as employer plans.
  • For multiple employers that offer coverage through a single group health plan, each employer must independently meet the requirements for the religious employer exemption or self-certify that they do not want to cover contraceptives.
  • Insured plans must comply with any state laws requiring contraceptive coverage under the group health plan.

Additional Documents Provided with the Regulation

The following documents were provided with the final regulation:

  • A form religious non-profit organizations can use to self-certify that they do not want to provide contraceptive coverage
  • A model notice insurers and TPAs can use to communicate the availability of separate contraceptive benefits to plan participants
  • A fact sheet that provides an overview of the key provisions included in the regulation
  • Technical guidance on the extension of the safe harbor for religious non-profit organizations through December 31, 2013

Read the final regulation

Read the fact sheet

Download the self-certification form and model notice for plan participants

Review technical guidance on the safe harbor that has been extended through December 31, 2013

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HEALTH CARE REFORM:

CoverColorado to Stop Coverage in 2014

Beginning January 1, 2014, CoverColorado, the state’s high-risk insurer, will stop coverage and will no longer be in service. The Patient Protection and Affordable Care Act (PPACA) makes it illegal for carriers to deny coverage to people with pre-existing conditions in 2014, so there will no longer be a need for CoverColorado’s services after 2013.

Those individuals looking for coverage, or for those who were previously covered through CoverColorado, can visit Connect for Health Colorado’s website to purchase insurance beginning in October. Plans purchased through Connect for Health Colorado from October through the end of December 2013 will become effective January 1, 2014.

You can also contact Connect for Health Colorado by phone at 855-PLANS-4-YOU or 855-752-6749.

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CARRIER UPDATES:

Anthem Offers Change of Effective Date

Anthem Blue Cross and Blue Shield offers small group clients the chance to move their health plan’s effective date to late 2013. This may help them keep their business running smoothly while securing their benefits and costs during this time of change.

Clients with effective dates of January 1, 2013 to September 1, 2013, can renew effective November 1, 2013 or December 1, 2013. Beginning later this summer, Anthem will send Shirazi Benefits change of effective date request information for employers with these effective dates. Our office will also receive updated rate information.

Specialty coverage change of effective dates will also change. Any integrated dental, vision, disability and life plans you may have will be changed to match your new medical change of effective date. Keeping administration as easy as ever.

Change is Easy
If your want to change their effective date to November 1, 2013, you will need to complete the Early Renewal Request form that Anthem will provide our office with later this summer. Mail, fax or e-mail the completed and signed form back to our office by October 1, 2013. If you want to change your effective date to December 1, 2013, return the form by October 15, 2013.

While this offer is open to all renewing small groups with these effective dates, Anthem encourages you to consult with your tax advisors to discuss your options. *

*It is important to note that not every group will benefit from changing their effective date. Because this option requires a change to your group’s plan year, you should discuss this option with your  legal or tax advisor before choosing it. The IRS has set forth criteria for when a group may change its plan year. For example, if your employer group coverage covers less than 51 employees, but the employer employs more than 50 full time equivalent employees, the employer may be subject to health care “shared responsibility” taxes that cannot be delayed by changing the plan year.

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New Rocky Mountain Health Plans Individual & Family Plans

Rocky Mountain Health Plans (RMHP) will be offering a variety of new ACA-compliant individual health plans both inside and outside the Exchange. The individual plans will be available statewide with several limited network options offered regionally on the Front Range and Western Slope.

RMHP’s current SOLO Individual Plans are still available for enrollment in 2013. They will continue to offer SOLO Individual and Family plans up to December 2013.

Their current SOLO and HMO Individual plans will be discontinued effective December 31, 2013. The new ACA-compliant health plans will be available as guarantee issue options to all individual members with no lapse in coverage.

In compliance with the Division of Insurance, RMHP will notify individual subscribers and members in July with subsequent notifications in August and September about their new plans and options in 2014. Benefit information and premiums will be provided specific to each member and family, as well as give step-by-step guidance on how to enroll in a new health plan for next year.

An important change to this discontinuation process is that a Carrier cannot automatically move members to a new plan. All individuals must actively select their new health plan for 2014. If RMHP does not receive acknowledgement from members on their plan choice, RMHP will be required to terminate their individual coverage.

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